Etihad Net Profit Jumps 200% to US$42m

As reported by ITTN on 24th January, Etihad Airways was again profitable in 2012. Etihad today reported net profit of US$42 million in 2012, up 200% on 2011 (US$14 million) in a year that saw strong improvements in revenues, passenger numbers and cost control.

Revenue increased 17% to US$4.8 billion (US$4.1 billion), on passenger numbers up 23% to 10.3 million (8.4 million). These numbers were boosted significantly by Etihad Airways’ equity partnerships and codeshares, which delivered more than US$600 million in total revenue.

James Hogan, President and Chief Executive, said: “This has been a game-changing year for Etihad Airways. We have delivered improved net profit, the second consecutive year we have been in the black, a remarkable achievement given the youth, ambitious growth and ongoing investment made by this airline in a challenging global economic environment.

“We have taken great strides in building the industry’s first ‘equity alliance’, with our investments in airberlin, Air Seychelles, Virgin Australia and Aer Lingus, which are contributing significant value to our business. We have met our mandate of contributing to the economic development of Abu Dhabi, growing its aviation sector and building trade and tourism connections across the globe.”

Earnings before interest and tax (EBIT) rose 24% to US$170 million (US$137 million), while EBITDAR (earnings before interest, tax, depreciation, amortisation and rentals) rose to US$753 million (US$648 million), a margin of 16% on total revenue.

Since James Hogan joined Etihad as President and Chief Executive in 2006, the airline has grown from a US$750 million business to one that now turns over nearly US$5 billion a year.

Etihad Airways attracted further support from the global financial community in 2012. More than 50 institutions have now provided more than US$6.8 billion in cumulative funding for the airline’s ongoing expansion. “Our bankers understand and trust our business, our vision and our potential,” he said.

During the year, growth in revenue passenger kilometres (RPKs) outpaced growth in available seat kilometres (ASKs) for the fourth year running. RPKs were up 23% to 48 billion (39 billion), on ASKs up 20% to 61 billion (51 billion), resulting in an impressive lift in seat factor of 2.4 points to 78.2% (75.8%).

Equity and codeshare partners delivered more than 1.2 million passengers on to the Etihad Airways network: airberlin, in which Etihad Airways holds a 29.21% stake, made a strong contribution with more than 300,000 passengers shared between their networks, delivering more than US$130 million in total to the two airlines.

Despite the increase in global oil prices during 2012, Etihad Airways minimised the impact through its fuel hedging policy. The airline hedged 80% of fuel costs during the year, the same level as in 2011.

Cost management in all other areas of the business saw non-fuel costs per available seat kilometre (CASK) reduced by 5%. Etihad’s costs were benchmarked as being in the lowest quartile against other major, full-service airlines by independent analysts, Seabury.

“We understand how to manage costs without compromising our innovative product and outstanding service experience,” added James Hogan.

The orders are for nine wide-bodied aircraft (six B777-300ER passenger, two B777 freighter and one A330 Freighter) and five narrow-body aircraft (four A320 and one A321). These will meet Etihad Airways’ immediate growth requirements.